Posted: January 2nd, 2017

If Brent uses his credit card to purchase a new television, then the money to pay the retailer is taken from: a) the credit card company’s M1 funds

Question 12 1 / 1 point If Brent uses his credit card to purchase a new television, then the money to pay the retailer is taken from: a) the credit card company’s M1 funds. b) his M1 funds. c) his M2 funds. d) the credit card company’s M2 funds. Question 13 1 / 1 point Which category of the money supply would you be contributing to if you invest in money market funds? a) savings deposits b) M2 c) time deposits d) M1 Chapter 14 Bank balance sheet Question 14 1 / 1 point Stealth bank holds deposits of $200 million. It holds reserves of $15 million. It has purchased government bonds worth $75 million. The current value of its loans, if sold at market value, is $130 million. What is the value of the Stealth bank’s liabilities? a) $200 million b) $330 million c) $20 million d) $5 million Chapter 13 Random Question 15 1 / 1 point When a shift in ________________ occurs, rational expectations hold that its impact on output and employment will only be temporary. a) aggregate supply b) wage levels c) aggregate demand d) price levels Question 16 1 / 1 point Why do neoclassical economists tend to put relatively more emphasis on long-term growth than on fighting recession? a) government focuses more on recession and cyclical unemployment b) price and wage stickiness is reasonable in the short run c) upward trend of potential GDP determines the rate of inflation d) standard of living is ultimately determined by long-term growth Chapter 15 Random Question 17 1 / 1 point According to the quantity theory, if constant growth in the money supply is combined with fluctuating velocity, which of the following is most likely to result? a) innovations relating to banking and finance b) unpredictable rises and falls in nominal GDP c) quantity of credit rises above where it otherwise be d) monetary policy will become inevitably imprecise Question 18 0 / 1 point When a Central Bank takes action to decrease the money supply and increase the interest rate, it is following: a) a quantitative easing policy. b) a expansionary monetary policy. c) a contractionary monetary policy. d) a loose monetary policy. Question 19 0 / 1 point When the central bank lowers the reserve requirement on deposits: a) the money supply increases and interest rates decrease. b) the money supply decreases and interest rates increase. c) the money supply and interest rates increase. d) the money supply and interest rates decrease. Chapter 15 problems Question 20 0 / 1 point 45. The diagram above refers to a private closed economy. In this instance, the equilibrium GDP is: a) $60 billion. b) between $60 and $180 billion. c) $180 billion. d) $60 billion at all levels